ML12226A297
| ML12226A297 | |
| Person / Time | |
|---|---|
| Site: | Maine Yankee |
| Issue date: | 08/09/2012 |
| From: | Weaver D W NRC/NMSS/SFST |
| To: | Norton W Yankee Atomic Electric Co |
| Goshen J M | |
| References | |
| TAC L24566, EA-11-283 | |
| Download: ML12226A297 (6) | |
Text
August 9, 2012 EA-2011-283
Mr. Wayne Norton President and Chief Executive Officer Yankee Atomic Electric Company 49 Yankee Road Rowe, MA 01367
SUBJECT:
RESPONSE YANKEE ATOMIC ELECTRIC COMPANY, YANKEE NUCLEAR POWER STATION - DISPUTED NOTICE OF VIOLATION 05000029 (TAC L24566)
Dear Mr. Norton,
This letter provides the results of the U.S. Nuclear Regulatory Commission's (NRC or Commission) review of your letter, dated February 23, 2012 (ADAMS Accession No. ML12066A038), regarding the Notice of Violation (NOV) (NOV EA-2011-271, dated January 27, 2012 (ADAMS Accession No.12027A200)). In your letter, you disagreed that the cited violation of Title 10 of the Code of Federal Regulations (10 CFR) 50.38, "Ineligibility of Certain Applicants," had occurred. The NRC has reviewed your letter and applicable supporting documentation, and it has determined that NOV EA-2011- 283 occurred as stated for the reasons stated below.
Yankee Atomic Electric Company (Yankee Atomic) is the licensee for the Yankee Nuclear Power Station and currently holds a 10 CFR Part 50 possession only license. Under 10 CFR 72, Subpart K, "General License for Storage of Spent Fuel at Power Reactor Sites," Yankee Atomic is authorized to store spent fuel. Yankee Atomic states that the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (ISFSI) is not a production or utilization facility and, therefore, does not fall within the provisions of the Atomic Energy Act that govern 10 CFR Part 50 licensees. In particular, you state that the statutory prohibition on foreign ownership, control or domination (FOCD) derives from the sections governing 10 CFR Part 50 licensees, therefore, the FOCD provisions do not apply to the Yankee Atomic license. Yankee Atomic notes in its letter that 10 CFR Part 72 has no explicit prohibition on foreign ownership control or domination (FOCD). Yankee Atomic states that its 10 CFR Part 50 licensee does not allow operation of a production or utilization facility.
The staff has determined that the Yankee Atomic proposal to apply the license transfer analysis of 10 CFR 50.80 to the FOCD restrictions of 10 CFR 50.38 is not appropriate. Yankee Atomics' letter did not acknowledge that as a 10 CFR Part 50 licensee it must comply with all the requirements of 10 CFR Part 50 as currently written. That Yankee Atomic is no longer authorized to operate an electric power production facility does not relieve it of the applicable 10 CFR Part 50 license requirements, including the FOCD requirements of 10 CFR 50.38. Yankee Atomic also states that the FOCD prohibitions of 10 CFR 50.38 cannot arise without a finding of transfer of control of the 10 CFR Part 50 license under 10 CFR 50.80. Yankee Atomic makes two statements in support of its position. First, it says that no foreign entity holds a
majority or controlling interest in Yankee Atomic. Second, it says the NRC reviewed and allowed a foreign interest, National Grid, to acquire an interest in Yankee Atomic, but concluded that the acquisition was not a transfer of control of the license.
Transfer of control of the license is not a necessary condition to make a determination that a foreign interest may have obtained FOCD of a licensee. With respect to the amount of ownership required to find FOCD, the NRC's Final Standard Review Plan on "Foreign Ownership, Control, or Domination," dated June 1999, (FOCD SRP) does not provide a specific threshold above which it would be conclusive that a licensee is controlled by foreign interests (64 FR 52357-52359). The NRC's FOCD evaluation considers the totality of the facts on a case-by-case basis. Section 3.2 of the FOCD SRP states, "An applicant is considered to be foreign owned, controlled, or dominated whenever a foreign interest has the power, direct or indirect, whether or not exercised, to direct or decide matters affecting the management or operations of the applicant" (64 FR 52355- 52358). Moreover, FOCD can arise due to foreign entities or persons with voting rights, financial arrangements, or management positions such as directors, officers, or executive personnel in the licensee's organization. Based on its review of the totality of facts presented, the NRC determined that Yankee Atomic violated 10 CFR 50.38 when it failed to implement a negation action plan that would negate the ability of foreign interests to exercise ownership, control or domination over Yankee Atomic.
In contrast, the previous determinations of transfer of control of the Yankee Nuclear Power Station ISFSI license under 10 CFR 50.80 did not examine the totality of facts with respect to FOCD, since the totality of facts did not become apparent until the NRC's review of the indirect license transfer application submitted on December 6, 2010. The NRC's review identified an apparent violation of the requirements in 10 CFR 50.38 due to a series of incremental ownership changes that resulted in Yankee Atomic being owned, controlled, or dominated by two foreign corporations - Iberdrola, based in Spain (9.5 percent) and National Grid, based in the United Kingdom (34.5 percent).
In addition, Yankee Atomic states that the indirect foreign ownership of minority shareholders in Yankee Atomic does not equate to FOCD. The NRC agrees that the FOCD evaluation is not a simple review of ownership percentages. As previously stated, the Commission's FOCD SRP explains that the FOCD determination considers the totality of facts on a case-by-case basis. This was the subject of the meeting held on September 20, 2011, in Rockville, Maryland, with representatives of Maine Yankee Atomic Power Company, Connecticut Yankee, Yankee Atomic Electric Company, and Northeast Utilities, (together referred to as the "Yankee Companies").
The organization and governance of the Yankee Companies were discussed at the meeting. According to the Yankee Companies representatives, Yankee Atomics' does not use weighted voting, where the number of directors was appointed based on the percentage of stock ownership or a unanimous consent provision in its bylaws, and all decisions by the Board are through a majority vote. Several directors represented foreign interests, and had the power, whether or not exercised, to participate in Board decisions regarding nuclear safety and security.
Yankee Atomic states that the NOV does not identify any safety or security issue in which a foreign entity exerted actual control over Yankee Atomic with respect to safety or security. However, asserting that actual FOCD was not exercised during that period is not relevant. The FOCD SRP states, "An applicant is considered to be foreign owned, controlled, or dominated whenever a foreign interest has the power, direct or indirect, whether or not exercised, to direct or decide matters affecting the management or operations of the applicant."
[Emphasis added]. FOCD SRP Section 4.2 directs the staff to consider whether the foreign interest has the ability to appoint managers. Finally, the regulatory standard is based upon a review of the totality of facts and circumstances which may require negation measures. Upon review of the information provided, the NRC has concluded that, in fact, foreign interests have that power. Since Yankee Atomic is a 10 CFR Part 50 licensee, it is required to comply with all of the requirements of 10 CFR Part 50. Based on information provided, the staff finds that Yankee Atomic was subject to FOCD and thus required a negation action plan during the period cited for in the NOV.
Separately, the NRC continues to review Yankee Atomic's request, dated May 16, 2011, (ADAMS Accession No. ML11139A088) for an exemption to 10 CFR 50.38. The NRC will notify you the results of the staff's evaluation when it is completed.
If you have any questions, please contact me at (301) 492-3338 or John Goshen of my staff, at (301) 492-3325.
Sincerely,
/RA/ Douglas W. Weaver, Deputy Director Division of Spent Fuel Storage and Transportation Office of Nuclear Material Safety and Safeguards Docket Nos.: 50-309, 72-30 License No: DPR-36 TAC No.: L24566 cc: Yankee Atomic Power Station Service List
ML11139A088) for an exemption to 10 CFR 50.38. The NRC will notify you the results of the staff's evaluation when it is completed.
If you have any questions, please contact me at (301) 492-3338 or John Goshen of my staff, at (301) 492-3325.
Sincerely,
/RA/ Douglas W. Weaver, Deputy Director Division of Spent Fuel Storage and Transportation Office of Nuclear Material Safety and Safeguards Docket Nos.: 50-309, 72-30 License No: DPR-36 TAC No.: L24566
cc: Yankee Atomic Power Station Service List DISTRIBUTION: SFST R/F BBenney TFredrichs ARivera MAshley JLubinski BMizuno SHamman/RI NHilton MMcLaughlin/RI NSheehan/RI ADeFrancisco/RI MFerdas/RI NMcNamara/RI MLombard ADAMS: File location: G:\SFST\Northeast Utilities\NOV Jan 2012\Response to contestations\NRC response to YA 2 23 12 letter.docx ADAMS P8 Accession No.: ML12226A297 OFC NMSS/SFST NMSS/SFST NMSS NMSS/SFST NMSS/SFST NAME WWheatley JGoshen KMattern MWaters DWeaver DATE 6/ 02 /2012 6/19/2012 6/ 21 /12 8/1 /2012 8/9/2012 OFC NRR NRR OGC OE NAME JSimpson CRegan CSafford JWray DATE 6/ 19 /2012 6/ 19 /2012 6/27/2012 6/21/2012 Yankee (Rowe) Nuclear Power Station Service List cc: David A. Repka Partner Winston & Strawn LLP 1700 K Street, N.W. Washington, DC 20006-3817 Mr. Joseph Fay General Counsel Yankee Atomic Electric Company 49 Yankee Road Rowe, MA 01367 Mr. Robert Capstick Regulatory Affairs Director Yankee Atomic Electric Company 77 Lakewood Rd. Newton, MA 02461 Assistant Attorney General Commonwealth of Massachusetts 200 Portland Street Boston, MA 02114 Director MA Radiation Control Program Schrafft Center, Suite 1M2A 529 Main Street Charlestown, MA 02129 Secretary Massachusetts Executive Office of Public Safety One Ashburton Place Room 2133 Boston, MA 02108
Peggy Sloan, AICP Franklin Regional Council of Governments 425 Main Street, Suite 20 Greenfield, MA 01301-3313 Regional Administrator, Region I U.S. Nuclear Regulatory Commission 2100 Renaissance Boulevard, Suite 100 King of Prussia, PA 19406-2713
W Norton Diane Screnci, Region I U.S. Nuclear Regulatory Commission 2100 Renaissance Boulevard, Suite 100 King of Prussia, PA 19406-2713
John Giarrusso State Liaison Officer Division Chief, Planning and Preparedness Massachusetts Emergency Management Agency 400 Worcester Road Framingham, MA 01702-5399